MUMBAI: Petroleum Minister Dharmendra Pradhan today said the government would soon finalise a formula to calculate premium on gas pricing for difficult blocks.
"Pricing of gas is a big challenge in the country. When we declared the last gas pricing formula, we have committed to give some additional premium for gas produced in difficult areas (ultra-deep water and deep water). We will be publishing the premium formula shortly," Pradhan told reporters on the sidelines of 'fourth National Convention: Oil & Gas India 2015' organised by India-Tech foundation here.
The premium will be given in new gas discovery, he said.
The government had earlier said all new discoveries in ultra-deep water areas, deep water areas, high pressure and high temperature areas would be given a premium price over the price to be determined as per gas pricing formula.
The government is also considering new bidding rounds for oil and gas discoveries, he said.
"At a time when oil prices are going down, we need to come out with an appropriate policy for oil and gas exploration and production. By the end of current financial year, we will prepare documents for next round of major assets bidding process for discovered marginal fields," Pradhan said.
The Modi government's Make in India policy will take manufacturing to new heights and there will be a huge requirement of energy, Pradhan said, adding that as per the estimates in the next 15 years there will be huge demand for petroleum products.
"We have finalised scheme for increasing local petroleum production. The government's priorities are more overseas investment in Indian companies and focus on energy conservation," he said.
"The country also needs equity oil in the country. We have made USD 30 billion worth investment in 30 countries through joint ventures but no equity oil. We have to think of equity oil, so we can get cheaper oil," he said. Foreign direct investment (FDI) in the petroleum and natural gas sector witnessed an almost ten-fold jump in financial year 2014-15 as compared to the preceding fiscal year, touching Rs 6,473.22 crore.
The government is encouraging foreign investment to supplement domestic investment and technological capabilities. Over the last three financial years, the sector attracted FDI worth more than Rs 8,375 crore, he said.
"We are now simplifying policy for more investment in public as well as private sector," he added.
Commenting on falling oil prices, Pradhan said, "I hope crude price remains below USD 40 for longer period. We need to convert this challenge into opportunities."